Focus Universal(FCUV) - 2025 Q2 - Quarterly Report

Technology and Innovation - Focus Universal Inc. holds 28 patents and patents pending in various phases of the patent process, aimed at solving fundamental problems in the IoT industry[87] - The company has developed a fully automated SEC financial reporting software that can complete processes that previously took weeks in just minutes, significantly reducing human error[107] - Focus Universal's Ubiquitor device integrates multiple digital sensors and measurement tools into a single platform, representing a technological advancement in the IoT marketplace[91] - Focus Universal's ultra-narrowband PLC technology utilizes existing power lines for data transmission, potentially offering a cost-effective solution for IoT connectivity[108] - The company anticipates that its ultra-narrowband technology can achieve low band 5G coverage with estimated speeds of 1 Gbps, enhancing wireless communication capabilities[112] - Focus Universal's automation technology aims to eliminate human involvement in financial reporting, ensuring a seamless and error-free process[104] - The company is optimistic about the patentability of its PLC technology, having received a favorable International Preliminary Report of Patentability[117] Financial Performance - Revenue for the three months ended June 30, 2025, was $35,330, an increase of $24,096 (214.5%) compared to $11,234 for the same period in 2024[126] - Gross profit for the three months ended June 30, 2025, was a loss of $12,412, a decrease of $27,696 compared to a profit of $15,284 in 2024[126] - Research and development costs for the three months ended June 30, 2025, were $467,297, an increase of $171,049 (57.7%) compared to $296,248 in 2024[129] - Total operating expenses for the three months ended June 30, 2025, were $1,530,348, an increase of $283,223 (22.7%) compared to $1,247,125 in 2024[127] - Revenue for the six months ended June 30, 2025, was $225,585, an increase of $34,846 (18.3%) compared to $190,739 in 2024[135] - Gross profit for the six months ended June 30, 2025, was $18,132, a decrease of $87,451 (83%) compared to $105,583 in 2024[135] - Compensation for officers and directors for the six months ended June 30, 2025, was $250,744, an increase of $138,696 (123.5%) compared to $112,048 in 2024[137] - Other income for the six months ended June 30, 2025, was $57,261, an increase of $41,178 (256.5%) compared to $16,083 in 2024[141] Cash Flow and Financial Position - Current assets as of June 30, 2025, were $1,536,963, a decrease of $2,309,400 (60%) compared to $3,846,363 as of December 31, 2024[144] - Working capital as of June 30, 2025, was $707,739, a decrease of $2,261,649 (76.5%) compared to $2,969,388 as of December 31, 2024[144] - For the six months ended June 30, 2025, the company reported net cash used in operating activities of $2,648,288, compared to $1,721,946 for the same period in 2024, indicating an increase in cash outflows[145][146][147] - The net loss for the six months ended June 30, 2025, was $2,757,026, slightly lower than the net loss of $2,680,703 for the same period in 2024[146][147] - Cash outflows from investing activities increased to $25,091 for the six months ended June 30, 2025, from $9,743 in the same period of 2024, primarily due to purchases of property and equipment[149] - Cash inflows from financing activities decreased significantly to $207,387 for the six months ended June 30, 2025, compared to $1,326,000 in 2024, reflecting a reduction in financing activities[150] - As of June 30, 2025, the company had an accumulated deficit of $28,539,334 and negative cash flow from operating activities, raising substantial doubt about its ability to continue as a going concern[152] - The company had cash and cash equivalents, and short-term investments totaling $1,150,614 as of June 30, 2025, which is critical for meeting future obligations[153] - The company expects fluctuations in cash flows from operating activities due to various factors, including changes in net revenues and collection of accounts receivable[148] - The company entered into a Share Purchase Agreement allowing Alumni Capital to purchase up to $20,000,000 of common stock, with proceeds of $381,224 recorded for the period ended June 30, 2025[151] - The company has not engaged in any off-balance-sheet arrangements as of June 30, 2025[154] - The company relies on equity and debt financings to fund operations and may face challenges in obtaining future financing on satisfactory terms[153] Product Development and Market Strategy - The company is set to showcase its SEC financial reporting software to the public in 2025, aiming to streamline the reporting process for financial professionals[88] - Focus Universal signed a contract with Shenzhen Donghui Precision Mold Manufacturing Co. to commence mold tooling design for the Universal Smart IoT, marking a significant step towards full-scale production[93] - Focus Universal's Smart AVX-branded products include LED audio-visual panel products and large format smart multimedia touch screens, enhancing integration across various technologies[95]